1H21 performance meets market expectations
Shimao Group announced 1H21 results: revenue rose 13.7% year-on-year to 73.4 billion yuan, and core net profit increased 11.5% to 6.2 billion yuan, in line with market expectations. The interim dividend per share was HK $0.70, unchanged from a year earlier, corresponding to a dividend yield of 4.6 per cent.
Financial security has been continuously strengthened. The company has positive sales in the first half of the year, efficient payback (1H21 rebate rate of 76%, 75% in 2020), restraint in land acquisition (only 13% in land acquisition intensity), net debt ratio of 50.9% in the middle of the year, 68.3% debt ratio of deducted assets, and 1.9 times short-debt ratio of cash, which is basically the same as at the beginning of the year and remains "green". The company has transferred some project partners from shareholder loans to real equity cooperation, the amount payable to related parties has been reduced by 20% compared with the beginning of the year, and the rights and interests of minority shareholders have increased by 13% compared with the beginning of the year. We believe that this will help consolidate the financial position and manage the leverage ratio. During the period, s & p upgraded the company to investment grade, and the final financing cost remained at 5.6%, which we expect to maintain throughout the year.
Take the land to abide by the discipline of investment, and the local reserves are still solid. The company's current stock is 72.83 million square meters, with a value of more than 1.1 trillion yuan, which can cover more than 3 years of sales. Among them, the goods value of first-and second-tier cities accounts for 74%, and resources focus on core urban agglomerations such as the Yangtze River Delta and the Greater Bay area. The unit cost of land storage is 31% of the average sales price. The company's current cash on hand has increased by 20% to 82.4 billion yuan compared with the beginning of the year, which can provide preparation for capturing reasonable opportunities for land acquisition. In the middle and second half of the year, with the gradual emergence of land market opportunities, the company has purchased about 20 billion yuan of land in June and about 10 billion yuan since July.
Development trend
It is expected that the sales target in 2021 will be achieved smoothly, and the sales quality will be stable and resilient. The company's annual sales target is 330 billion yuan, an increase of 10% over the same period last year. The company's new push and roll inventory value will reach 360 billion yuan in the second half of the year, with abundant reserves. Since the beginning of the year, the company has signed a sales gross profit margin of about 25-26%, the equity ratio is slightly higher than 60%, and the sales quality is resilient.
Under the "big aircraft strategy", multi-business is actively developing. The company actively promotes the diversified business layout of the "big aircraft strategy": property development as the core body, commercial operation, hotel and property management as solid wings, and high-tech, medical, pension and other investments as the key tail for balanced development. In the first half of the year, as the epidemic crackdown was removed, the company's business and entertainment rental income increased by 43% year-on-year to 1.16 billion yuan, hotel revenue increased by 141% to 1.19 billion yuan, and service revenue increased by 171% to 4.23 billion yuan. Looking forward, the company plans to maintain its target of non-housing income exceeding 15 billion yuan in 2021, and plans to account for more than 20% of total revenue within three years. 1H20 has reached 9% (5.4% for 2018-20 years, 5.4% for 5.6% and 5.6% for 20 years, respectively).
Profit forecast and valuation
Based on a slight revision of the gross profit margin at the end of the statement, we lowered our core net profit forecast for 2021 / 2022 by 306596 to 138 / 15.5 billion yuan, corresponding to a year-on-year growth rate of 12.1%. The current share price corresponds to 3.0x P shock E and 10.9% 12.3% dividend yield in 2021 / 2022. Maintain the outperforming industry rating, and lower the target price by 2496 to HK $22.65 (mainly due to the pressure on investors' risk appetite caused by disturbances such as industry policy), corresponding to the upside space of 5.0x 2021 Phand E and 48% 6.
Risk
Financing Xiaobai Maimai Inc policy tightened more than expected.